THE 15TH ANNUAL ONE ON ONE EFG HERMES CONFERENCE DUBAI MARCH 2019 - RAK Ceramics
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INVESTOR PRESENTATION
THE 15TH ANNUAL ONE ON ONE EFG HERMES CONFERENCE
DUBAI
MARCH 2019
RAK Ceramics PJSC © 2019. All rights reserved 1
INVESTOR PRESENTATION
Attendees
Abdallah Massaad PK Chand Wassim Moukahhal
Group Chief Executive Officer Group Chief Financial Officer Executive Board Member
Abdallah Massaad is Group CEO of RAK Ceramics. and has Pramod Kumar Chand is the Group Chief Financial Officer Wassim Moukahhal is a member of the Board of Directors
over 22 years experience in ceramics manufacturing, sales of RAK Ceramics. Mr. Chand has wide experience in and the Executive Committee of RAK Ceramics.
management, product marketing and business leadership. dealing with corporate finance matters including treasury Mr. Moukahhal is currently serving as Managing Director of
Prior to RAK Ceramics, Mr. Massaad was General Manager and working capital financing, project finance, venture Samena Capital Investments Limited in Dubai and has more
of ICC SARL, Lebanon. capital, debt & equity capital market instruments, fund than 12 years of experience in private equity investments
Mr. Massaad holds post graduate qualifications in raising processes and general management. within the MENA region.
Management (DEA in Business Administration) and an Mr. Chand is a Member of the Institute of Chartered Mr. Moukahhal holds an MBA from the Wharton School at
undergraduate degree (Maitrise in Business Administration Accountants of India (CA) and has been a rank holder and the University of Pennsylvania and a Bachelor’s degree in
- Marketing) from Université Saint-Esprit de Kaslik, winner of A F Ferguson award. Economics and Finance from McGill University.
Lebanon.
RAK Ceramics PJSC © 2019. All rights reserved 2
INVESTOR PRESENTATION
Disclaimer
This information contained in the enclosed presentation summarises preliminary and and past performance is not indicative of future results. The Company undertakes no
introductory information on RAK Ceramics PJSC (the Company). This presentation obligation to publicly update or publicly revise any forward-looking statement,
has been prepared for information purposes only and is not and does not form part whether as a result of new information, future events or otherwise. Accordingly all
of or constitute any prospectus, offering memorandum or offering circular or offer potential recipients are expected to conduct their own due diligence on the
for sale or solicitation of any offer to subscribe for or purchase or sell any securities information provided.
nor shall it or any part of it form the basis of or be relied on in connection with any
These materials are confidential and are being submitted to selected recipients only
credit evaluation or third party evaluation of any securities or any offerings or
for the purpose described above. They may not be taken away, reproduced (in whole
contract or commitment whatsoever.
or in part), distributed or transmitted to any other person without the prior written
The information contained herein has been prepared by the Company. Some of the consent of the Company. These materials are not intended for distribution to, or use
information relied on by the Company is obtained from sources believed to be by any person or entity in any jurisdiction or country where such distribution or use
reliable but does not guarantee its accuracy or completeness. All potential recipients would be contrary to local law or regulation and must not be acted on or relied on
of the enclosed presentation are expected to be aware that the information by persons who are not relevant persons. If this presentation has been received in
contained herein is preliminary as of the date hereof, supersedes any previous such error it must be returned immediately to the Company.
information delivered and will be superseded by any such information subsequently
delivered. The information contained herein is subject to change without notice. The
Company is under no obligation to update or keep current the information
contained herein. No person shall have any right of action (except in case of fraud)
against the Company or any other person in relation to the accuracy or
completeness of the information contained herein.
Some of the information in this presentation may contain projections or other
forward-looking statements regarding future events or the future financial
performance of The Company. These forward-looking statements include all matters
that are not historical facts. The inclusion of such forward-looking information shall
not be regarded as a representation by the Company or any other person that the
objectives or plans of the Company will be achieved. Future events are subject to
various risks which cannot be accurately predicted, forecasted or assessed. No
assurance can be given that future events will occur or that the company’s
assumptions are correct. Actual results may differ materially from those projected
RAK Ceramics PJSC © 2019. All rights reserved 3
INVESTOR PRESENTATION
Company Overview
Overview Strategy Results
RAK Ceramics PJSC © 2019. All rights reserved 4
INVESTOR PRESENTATION
RAK Ceramics at a glance
+ 25YEARS
Ceramic expertise
One of the largest ceramic
brands in the world.
15,000
Global workforce
150 1
OWNERSHIP
+ + BILLION SQM 29.2% 30.6%
Countries exported Tiles supplied worldwide
5.0%
5.3% 11.4%
486MN 755MN
5.3%
6.3% 7.0%
US$ US$
Samena Capital Institutional Investments
Market Cap. Group turnover Al Rajhi Holdings, KSA RAK Royal Family Members
General Pension Social Authority, UAE H.H. Sheikh Saud Bin Saqr Al Qasimi
RAK Government Retail Investors
RAK Ceramics PJSC © 2019. All rights reserved 5
INVESTOR PRESENTATION
Brief history
1989 1991 1993 2000 2004
Founded by H.H. Sheikh First tile plant began in First sanitaryware plant Opening of First overseas RAK Porcelain was
Saud Bin Saqr Al Qasimi the UAE began in the UAE tile plant in Bangladesh established
No.1
2006 2010 2014 2016 2018
India operations began Became the world’s Samena Capital acquires Launch of new brand Saudi Arabia
largest ceramics 31% stake in RAK identity expansion announced
manufacturer Ceramics
RAK Ceramics PJSC © 2019. All rights reserved 6
INVESTOR PRESENTATION
Business lines
TILES SANITARYWARE
We offer 6,000+ models, Complete solutions
one of the largest provider offering products
collections of ceramic wall designed to suit all budgets
and floor tiles, gres and tastes with accessories
porcelain and super-sized and bathroom furniture.
slabs in the industry.
TABLEWARE FAUCETS
Products supplied to over Eco-friendly faucets and
20,000 hotels across bathroom fittings with a
more than 140 countries strong focus on water-
with clients including JW saving technology, offering
Marriott, Hilton, Hyatt, up to 60% saving on water
and Sheraton amongst consumption.
others.
RAK Ceramics PJSC © 2019. All rights reserved 7
INVESTOR PRESENTATION
Manufacturing footprint
2019 GLOBAL PRODUCTION
• 22 plants worldwide 22
• 16 Tiles Plants in UAE (10), India (3), Bangladesh
PLANTS
(1), Iran (1) and China (1).
WORLDWIDE
• 4 Sanitaryware Plants in UAE (2), India (1), and
Bangladesh (1)
• Tableware - UAE (1)
CHINA 1
IRAN 1
123MN 5MN BANGLADESH 2
UAE 14
Square metres of tiles Pieces of sanitaryware
INDIA 4
24MN 1MN
Pieces of tableware Faucets and taps
RAK Ceramics PJSC © 2019. All rights reserved 8
INVESTOR PRESENTATION
Production capacity by location
TILES SANITARYWARE
5%
5%
13%
9%
10%
30% 57%
71%
UAE (82mn sqm)
Bangladesh (11.6mn sqm)
India (18mn sqm) UAE (3.0mn pieces)
Iran (6mn sqm) Bangladesh (1.6mn pieces)
China (5.5m sqm) India (0.7mn pieces)
FAUCETS
TABLEWARE
100% of Faucets produced in UAE (1mn pieces)
100% of Tableware produced in UAE (24mn pieces)
RAK Ceramics PJSC © 2019. All rights reserved 9
INVESTOR PRESENTATION
Market position in focus markets - Tiles
UNITED ARAB EMIRATES BANGLADESH
Our market share in United
Arab Emirates has increased
from 22% in 2017 to 25% in
2018 driven by increase in # 1 # 1
project sales. The three largest
Market Size* 86 (MN SQM) Market Size* 76 (MN SQM)
ceramics producers in the
region account for >80% of the Market Share 25% Market Share 10%
total production capacity.
UAE market grew by +3.6% in
2017 compared to 2016
SAUDI ARABIA INDIA
Bangladesh markets continue
to grow with tile consumption
increasing +7.0% in 2017
compared to 2016.
# 2 #5
Market Size* 203 (MN SQM) Market Size* 760 (MN SQM)
Market Share 7% Market Share 2%
Source: 2017 Ceramic World Review, *2018 data unavailable.
RAK Ceramics PJSC © 2019. All rights reserved 10INVESTOR PRESENTATION
Global market position - Tiles
PRODUCTION (MILLION SQM)
In 2018 RAK Ceramics retained
it position as the 4th largest
tile producer globally. MOHAWK INDUSTRIES, INC 240
SIAM GROUP 187
GRUPO LAMOSA 171
RAK CERAMICS PJSC 82
PT MULIAKERAMIK 80
CERAMICA CARMELO FIOR 81
PAMESA 74
GRUPO FRAGNANI 74
KAJARIA CERAMICS 64
CERSANIT SA 60
Source: *Ceramic World Review 2017
RAK Ceramics PJSC © 2019. All rights reserved 11INVESTOR PRESENTATION
Vision and key strengths
The world’s leading ceramics lifestyle
solutions provider.
EXPERIENCE WIDE RANGE INNOVATION QUALITY
We have helped to create We are known for our wide Innovation is at the heart of We are able to consistently
some of the world’s most product range and our our philosophy and we manufacture high quality
iconic buildings. ability to produce bespoke have continuously led the products with an
ranges for small and large way in terms of product impeccable finish.
scale projects. development.
RAK Ceramics PJSC © 2019. All rights reserved 12INVESTOR PRESENTATION
Business Strategy Update
Overview Strategy Results
RAK Ceramics PJSC © 2019. All rights reserved 13INVESTOR PRESENTATION
Value creation plan achievements
ISSUES AND OPPORTUNITIES IDENTIFIED VALUE CREATION INITIATIVES AND IMPACT
TRANSFORM “RAK INC.” !Divestment proceeds of >USD 130m from 12 non-core exits
Exit of Non -Core operations !Proceeds used to fund capex, de-lever the balance sheet and pay dividends
BACK TO “RAK CERAMICS
!RAK Sudan exit generated proceeds of AED 220m
Loss-making Sudan & China operations
!Shut down of RAK China removed losses from consolidated P&L
!Increased Bangladesh tiles capacity by 45% to 11.6mn sqm
Production capacity !Increased SW capacity by 20% in the UAE and 25% in Bangladesh
!Switched to a “Pull” sales & distribution model
“Push” sales & distribution model !Created a B2B sales team targeting real estate and hospitality sectors
!Flagship wins: Emaar and Al Habtoor (UAE), H&M and Starbucks (Int’l)
REFOCUS AND GROW THE !Switched to a life style brand
Manufacturing brand !New brand launched in Q3 2016
CORE BUSINESS
!Acquired UK, Germany, Italy and Saudi Arabia distribution JV’s
Inefficient distribution network in key markets
!Gained control over access into new markets, channels and customers
!Initiated a turnaround plan
Untapped value in India operations !Production capacity increased by 38% through Morbi acquisitions
!Dealer network rationalized & new brand rolled-out
!RAK Porcelain has grown from a start-up into a leading player in the HoReCa industry. Strategic
Tableware potential; candidate for unlocking value discuss underway to further scale the business and unlock value
Improve corporate governance structures !Overhauled corporate structure; streamlined ownership of subsidiaries
INSTITUTE A WORLD-CLASS across the group !Added Independent Directors to the Board
CORPORATE GOVERNANCE
STRUCTURE ! Recruited top-talent into leadership positions
Gaps in HR and Investor Relations
RAK Ceramics PJSC © 2019. All rights reserved 14INVESTOR PRESENTATION
Value creation plan achievements (Cont’d)
NON-CORE ASSETS DIVESTED; PROCEEDS REINVESTED IN CORE BUSINESS BALANCE SHEET REDUCED AND DIVIDENDS DISTRIBUTED
12 >US$ 130MN TOTAL ASSETS (AED MN)
5,679 5,497
DIVIDEND PAID
35%
30%
3,039 25%
2,783
# of exits since Q2 14 In divestment proceeds
15% 15% 15%
10%
110MN 275MN
2,639 2,714 5% 5% 5%
>US$ >US$
2013 2018 2013 2014 2015 2016 2017 2018
reinvested in core production In cash dividends (2014-2018)
capacity and three 5% stock dividends Shareholder Equity Total Liabilities Cash Stock
CORE BUSINESS NOW CONTRIBUTES THE MAJORITY OF THE TOPPLING PROFITABILITY ENHANCED TO RECORD LEVELS
4.9%
8.4%
18.7% 14.7% 16.0% 13.0%
CONSOLIDATED GP MARGINS (%) CORE GP MARGINS (%)
+578bps +460bps
33.2% 33.3%
91.6% 95.1%
81.3% 85.3% 84.0% 87.0% 28.7%
27.4%
2013 2014 2015 2016 2017 2018 2013 2018 2013 2018
Core Non Core
RAK Ceramics PJSC © 2019. All rights reserved
15INVESTOR PRESENTATION
Strategic initiatives 2019-2021
UAE • Build a manufacturing facility in Saudi Arabia, adding c.10mn sqm of low-cost production capacity
• Execute the turnaround strategy to scale revenues and enhance profitability, putting the company on-track to become a
top-5 ceramics player
• The turnaround positions the company as an export-hub catering to key markets in Europe and the Asia Pacific
INDIA • Priorities in 2019 include:
! Production expansion by ramping up commercial production at the recently acquired Morbi facilities
!Distribution: win project orders of scale from developers
!Production cost optimization
BANGLADESH • Maintain market leading position
• Achieve further scale through a strategic transaction, in order to unlock shareholder value
RAK PORCELAIN
(TABLEWARE) • The business is at a stage where it can achieve further scale through acquiring or partnering with strategic players to (i)
enter new markets, (ii) grow the product portfolio and/or (iii) add new distribution channels
IRAN PLANT • Maintain production at required levels, until sanctions are lifted
REAL ESTATE
• Aim to monetize the real estate portfolio by partnering to develop the sea-front land (book value: c.AED 900mn, size:
270,000 sqm) and Sell Acacia Hotel
RAK Ceramics PJSC © 2019. All rights reserved 16INVESTOR PRESENTATION
GCC expansion strategy 2019-2021
The Board has approved the construction of a secondary, low-cost manufacturing facility in Saudi Arabia. This will enable
the company to be more competitive in the commodity/fast-moving segments of regional and European markets
SITUATION BACK GROUND
The state-of-the-art production facility will utilize
the latest technology in ceramics manufacturing
• RAK Ceramics is facing the below challenges which are slowing down growth in core
profitability:
• a high cost of production from input costs in Ras al Khaimah
• transportation costs to end-markets, and ~US $100M ~2 YEARS
• increasing competition in export markets
Estimated time line of
• To increase profitability levels, low-cost manufacturing bases need to be established to Investment commissioning
allow company to be more competitive in the commodity/fast moving segment of key
markets such as Saudi Arabia, Europe and Africa.
• In February 2019, the Board of Directors approved the establishment of a Greenfield
manufacturing facility in Saudi Arabia RAS AL
• Saudi Arabia was selected as it has highest growth potential, given the expected SAUDI ARABIA
KHAIMAH
real estate and construction boom.
• Producing in Saudi Arabia at a lower cost will help bridge the gap between the
current net income run-rate and target earnings level US$ 10.91 US$1.62 Fixed
Gas price/MMBtu
Variable until 2039
• The specific location for the facility was evaluated based on:
• The quantity and cost of gas available
• Proximity to key-end markets Electricity price/
US0.13 US$0.05
KWH
• Availability of local raw materials
• The facility will have an initial production capacity of 10mn square meters per annum
Water price/m3 US$2.37 US$2.13
RAK Ceramics PJSC © 2019. All rights reserved 17INVESTOR PRESENTATION
GCC expansion strategy 2019-2021 (Cont’d)
The Saudi Arabian construction sector is expected to witness a recovery driven by a large number of infrastructure
projects, in line with the government’s aim to diversify the oil- based economy
TILES MARKET FORECAST IN SAUDI ARABIA
• The market is expected to witness moderate growth
to register a CAGR of 5.75% from 2017 to 2021, as the
2018-2022 VOLUME
construction sector in Saudi Arabia is expected CERAMIC TILE MARKET VOLUME AND MARKET VALUE 2013-2022
CAGR 5.75%
witness a modest recovery starting in 2019.
1,120 1,056 1,048 1,093 1,099
1,001 1,039 1,000
• The central and the western regions currently 934
831
contribute around 80% of the overall demand, which
is likely to continue over the medium term with the 235 244 263 248 203 219 234 246 256 258
majority of projects located in these regions.
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
• The central region currently has the largest share of
Volume (in m sqm) Value (USD m)
projects under construction mainly due to major
residential developments and Sudair Industrial City.
VALUE OF SAUDI ARABIA PROJECTS IN CONSTRUCTION AND PLANNING STAGE, BY REGION
• The mega-projects (NEOM, Red Sea Project)
announced as part of Vision 2030 are located mainly
in the north-west of the country Saudi. The 4% 3%
continuing renovation and expansion work in the 26%
Two Holy Cities of Makkah and Madinah mean that Central Region
Projects Eastern Region
demand will continue to grow in the west. 37% under 48%
Projects by
Western Region
planning stage
Construction Others
by Value
by Value Central Region 10%
Eastern Region 61%
Western Region
11% Others
Source:RAK Estimates on value, ACIMAC World Production & Consumption report 6 Ed. Oct 2018 Ventures onsite and VME Analysis Nov 2018. Please Note that 5.75% CAGR is subject to projects being executed without significant delay.
RAK Ceramics PJSC © 2019. All rights reserved 18INVESTOR PRESENTATION
Financial Performance
Overview Strategy Results
RAK Ceramics PJSC © 2019. All rights reserved 19INVESTOR PRESENTATION
Financial performance trend
FY 2018 RESULTS
REVENUE (AED BN) GROSS PROFIT (%)
26.0 28.2 30.5 31.6 33.2
Core revenue increased by +1.0% 3.3 3.1 2.8 2.9
2.8 30.5 30.3
32.5 33.3
30.6
28.2 29.3
0.5
in 2018 as a result of steady 0.5 0.4
0.2 0.1
22.6
21.2
growth in tiles by +0.4% and 16.7
strong growth in tableware by 2.8 2.6 2.4 2.6 2.6
+11.0% YoY driven by the United
states, Europe and Asian markets 2014 2015 2016 2017 2018
2014 2015 2016 2017 2018
Total revenue decreased by -2.8% Core Non-Core
Core Non-Core Total
YoY.
Total gross profit margin of EBITDA (AED MN) AND MARGIN (%) NET PROFIT (AED MN) AND MARGIN (%)
33.2%, +160bps compared to
315.5
2017, an all-time high. 584.4 594.1
281.7
310.3
533.4
485.7 461.6
Core gross margins increased 225.1
+80bps in 2018 despite increase
in energy and raw material prices. 17.8% 19.3% 17.4% 18.7% 16.6%
8.6% 10.1% 11.1% 8.1%
30.8
1.1%
2014 2015 2016 2017 2018 2014 2015 2016 2017 2018
RAK Ceramics PJSC © 2019. All rights reserved 20INVESTOR PRESENTATION
FY 2018 Highlights and challenges
2018 HIGHLIGHTS
NET PROFIT BRIDGE (AED M)
-28.7%
• Revenue growth in the UAE, India and AED 104.5MN
Tableware business
• Stable performance in Bangladesh
• Continued cost efficiencies, increasing +14.1
-38.6
gross profit margins
• Increased A- Grade production across all -55.0 -10.9
tile plants
• Iran Turnaround
• Robust performance in Tableware and 315.5 225.1
Kludi RAK
Growth in
Net Profit Net Gain on Gas Cost Non-core net Net Profit
Core
2018 CHALLENGES 2017 Sale of stakes increase profit 2018
performance
2017 reported net profit of AED 315.5mn included extraordinary gains of 38.6mn, related to the
• Europe profitability still struggling disposal of RAK Warehouse and Electro RAK
• India turnaround; despite revenue growth In 2018 reported net profit of AED 225.1mn (-28.7% YoY), is driven by:
in INR, gross profit margins were lower
-An AED 55.0mn increase in the company’s gas bill, with gas at an average price of $10.86/
than target owing to unabsorbed fixed mmbtu in 2018 (+27% YoY)
costs related to earlier plant shut-down
• Impact of Saudi Arabia integration -A reduction in non-core profit of AED 10.9mn, following the discontinuation of operations
(reduction in overheads) delayed at Al Hamra Construction (non-core asset)
• China exit still in progress -Growth in core business profitability of AED 14.1mn; driven by operational efficiency
improvements and higher gross profit in the UAE, Bangladesh and the Tableware business
RAK Ceramics PJSC © 2019. All rights reserved 21INVESTOR PRESENTATION
FY 2018 Performance by segment
FY 2018 RESULTS
REVENUE BY SEGMENT (AED MN)
2018 2017
Core revenue in 2018
increased by +1.0% due to Amount Amount Growth
strong performance in tiles and
tableware segments. Tiles 1,878.9 1,871.3 0.4%
Effective from 1st Jan 2018, revenue
recognition is changed as per IFRS 15. Sanitaryware 497.5 505.9 -1.7%
Based on dispatches core revenue
increased by +1.7% YoY. Tableware 264 237.8 11.0%
REVENUE BY SEGMENT 2018 (%)
Total Core 2,640.4 2,615.0 1.0%
4.9%
9.5%
Non-Core 135.8 239.9 -43.4%
17.9%
Tiles
Sanitaryware
67.7% Tableware
Non-core Total Revenue 2,776.2 2,854.9 -2.8%
RAK Ceramics PJSC © 2019. All rights reserved 22INVESTOR PRESENTATION
FY 2018 Performance by region
FY 2018 RESULTS
TILES & SANITARY WARE REVENUE BY REGION (AED MN)
2018 2017
UAE and Saudi Arabia markets Amount Amount Growth
are key drivers of growth year
UAE 792.8 754.5 5.1%
on year.
In local currency growth in India is Saudi Arabia 258.1 225.3 14.6%
+2.5%
Middle East 124.8 138.6 -9.9%
Due to election in December 2018 in
Bangladesh revenue in local currency
India 307.2 322.6 -4.8%
decreased -1.3%.
REGIONAL CONTRIBUTION 2018(%) Europe 352.1 368.9 -4.6%
Bangladesh 297.7 316.6 -6.0%
11%
12% Africa 87.2 125.0 -30.3%
UAE 33%
KSA
ME Rest of the world 156.5 125.6 24.6%
India 15%
Europe
Bangladesh 11% Total 2,376.4 2,377.1 -0.0%
Others 13% 5%
RAK Ceramics PJSC © 2019. All rights reserved 23INVESTOR PRESENTATION
Gross profit margins trend
FY 2018 RESULTS
GROSS PROFIT (%) TILES GROSS PROFIT (%)
26.0 28.2 30.5 31.6 33.2
Total gross margin increased by 30.5 30.3
32.5 33.3
30.6 28.0 28.5
29.3
+160bps YoY to an all time high of 28.2 24.4 24.6 24.8
33.2% 22.6
21.2
16.7
Core margin increased by +80bps YoY
to 33.3% driven by improvements in
operational efficiencies, higher gross
profits in UAE, Bangladesh and 2014 2015 2016 2017 2018
2014 2015 2016 2017 2018
tableware.
Core Non-Core Total
Margins improved despite an increase
of AED55m YoY in energy costs at an
average gas price of US$10.9/MMbtu.
SANITARYWARE GROSS PROFIT (%) TABLEWARE GROSS PROFIT (%)
RAKC is at significant disadvantage to its
peers as it pays a higher gas price, 45.4 43.5 41.3 40.3 61.4 61.0
however RAKC remains profitable. 39.2
56.1
50.1 52.0
RAKC would deliver higher core income
growth if gas costs were competitive;
management are developing a strategy
to address the situation.
2014 2015 2016 2017 2018 2014 2015 2016 2017 2018
RAK Ceramics PJSC © 2019. All rights reserved 24INVESTOR PRESENTATION
Tableware performance trend
FY 2018 RESULTS
REVENUE (AED MN) GROSS PROFIT MARGIN (%)
The tableware business
continues to show growth with
revenues increasing by +11.0% 264.0 61.4% 61.0%
237.8 56.1%
YoY to AED 264m driven by 175.0
50.1% 52.0%
145.8
growth in United States, 35.1
Europe and Asian markets. 2014* 2015 2016 2017 2018 2014* 2015 2016 2017 2018
Strategic focus on growth in Europe
and United States.
US Market growth in progress.
NET PROFIT (AED MN) AND MARGIN (%) EBITDA (AED MN) AND MARGIN (%)
Opened new flagship showroom in Ras
54.6 56.0 63.1
al Khaimah , UAE and distribution 49.3 59.7
53.0
center in Pennsylvania, USA. Frankfurt
61.8% 63.2%
showroom is operational. 34.1 37.5
Logistics centre under construction in 21.7
28.2% 22.2 30.3%
23.4% 22.9% 25.7% 25.1% 23.9%
21.2%
Luxembourg, full benefits from these
investments in Q2 2019.
2014* 2015 2016 2017 2018 2014* 2015 2016 2017 2018
*Consolidated from Q4 2014
RAK Ceramics PJSC © 2019. All rights reserved 25INVESTOR PRESENTATION
Balance sheet evolution
FY 2018 RESULTS
RETURN ON EQUITY (%) OPERATING CYCLE (DAYS)
11.4 281
10.4 262 280
Return on equity is 8.1% in 9.0
218 225
8.1
2018. 180 188 214 227 246
Operating Cycle is stable at 280 days. 7.1 120
(Adjusted)
107 108 110 108
Payable days has also increased from -69 -71 -62 -66 -74
1.1
66 days in 2017 to 74 days in 2018. 2014 2015 2016 2017 2018
2014 2015 2016 2017 2018
Capex in 2018 is higher due to Co- Payable days Receivable Days Inventory Days
Gen plants installation and in India JV
plants.
Capex guidance for 2019 is ~AED
CAPEX SPENDING (AED M) NET DEBT (AED M)
250mn including ~AED 125mn for 3.4 3.1
Maintenance. 282 267 2.4 2.7 2.6
215 244
141 139 94
92
98
1,660
141 150 1,610
129 123 83
15
2014 2015 2016 2017 2018 1,421 1,408 1,429
2014 2015 2016 2017 2018
Growth Maintenance Net debt Net debt to EBITDA
RAK Ceramics PJSC © 2019. All rights reserved 26INVESTOR PRESENTATION RAK Ceramics PJSC © 2019. All rights reserved 27
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